Chris Farrell, the economics editor of public radio’s Marketplace Money, explains in his new book The New Frugality, that out of the tough economic times we have been living for the past year or so comes a new trend. Farrell titles this financial approach “The New Frugality.” In the book Farrell explains the theory and practice of the New Frugality in an accessible manner.

Throughout the book, Farrell stresses managing finances with a “margin of safety.” He gives examples of this approach, including a down payment of 20 percent or more on a home, a thirty-year fixed-rate mortgage, along with some common sense examples such as spending less than you earn and paying off the credit card bill in full. The other main idea Farrell stresses is sustainability. He states that these two ideas feed off and support one another. Farrell makes the claim that the New Frugality isn’t something to glumly embrace. Instead, he states we can “live a better way and have fun at the same time,” with caring and giving as the essence of sustainability.

Farrell lists the key building blocks for getting finances under control, which he calls the New Frugality Rules. His rules: Keep it Simple; Pay Yourself First; Invest in Yourself; Worry About the Downside; Borrow Rarely and Wisely; Give Back; and Think Big. The book details how to follow these rules, using easy-to-understand examples to illustrate his advice.

His chapter on borrowing wisely addresses foolish debt and wise debt. Farrell indicates that the difference between the two is the margin of safety. Good debt offers a rate of return, an investment in the future, while foolish debt is frivolous. Farrell then gives suggestions on how to eliminate debt, and includes some additional resources for more information.

The thirty-eight page chapter on investing is more complex; it focuses on savings and investments. Farrell states that saving money is hard but investing is easy. However, the average reader will probably want to read this chapter more than once, as the advice Farrell offers differs with the age and situation of the investor. Farrell’s key rules of investing are “you can’t consistently beat the market, trading is hazardous to your wealth, and managing risk is key.”

Home ownership is also addressed in The New Frugality. Farrell states that buying “as much home as you can” is a recipe for financial trouble. He also refutes the statement that renting is “throwing your money away.” Again, the question boils down to which offers a better margin of safety for you, owning or renting?

Farrell poses that home ownership isn’t a good investment, as such, but isn’t a mistake for many people.

The New Frugalitystresses the importance of values and states “giving back is a core part of any long-term financial plan…it sustains the community and it lets us know that we aren’t alone.” He quotes financial planner Ross Levin: “Planned, systemic giving to charity helps dislodge the hold that money may have over you.” The book lists numerous options for charitable giving.

Real circumstances of both good and bad decisions are used by Farrell to illustrate his financial method. His expertise as a financial reporter and his years of conversations about finances allow him to give the reader sound, down-to-earth advice on managing money in a conscientious and satisfying way.